Forms of business organization, DISTINCT FORMS OF BUSINESS, SOLE PROPRIETORSHIP, JOINT HINDU FAMILY BUSINESS, PARTNERSHIP

1. FORMS OF BUSINESS
ORGANIZATION
Presented By:
Mr. S.M. Ambore
Asst. Professor,
DK Patil Institute of Pharmacy, Loha. Nanded

2. LEARNING OUTCOMES….
FORMS OF BUSINESS
ORGANIZATION
DISTINCT FORMS OF BUSINESS
FEATURES OF SOLE
PROPRINTORSHIP
JOINT HINDU FAMILY BUSINESS
PARTENERSHIP 2

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 Business means any activity that keeps a person busy.
FORMS OF BUSINESS ORGANIZATION
Business
Activities
Trade
Banking
Transport
Warehousing
Manufacturing
Insurance
Packaging
Advertising

4. DISTINCT FORMS OF BUSINESS
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It is classified into three groups such as,
1. Sole proprietorship
2. Partnership
3. Joint stock company
4. Cooperative society

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SOLE PROPRIETORSHIP
It is simple form of business organization, called
as “one man business”.
FEATURES OF SOLE PROPRINTORSHIP:
1. It has full authority of business. He has to act
according to his ability and skill.
2. There is no partnership or association.
3. No legal formalities are required to start
business, except to start a retail drug store, a
license is needed from drug administration.
4. The liability of them is unlimited.

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SOLE PROPRIETORSHIP
ADVANTAGES:
1. Most easily formed of all forms of business
organization. No legal formalities are
necessary.
2. Secrecy of business affairs can be maintained.
3. It is free to take any decision in regard to all
matters
4. It is able to establish personal contact with
their costumer.
5. Capital investment in business can be increased
or decreased at will.

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SOLE PROPRIETORSHIP
DISADVANTAGES:
1. Generally it suffers due to lack of adequate
financial resources.
2. It is very difficult for single person to look
after every aspect. Such as, production, sale,
finance, etc.
3. Business ends with death of proprietor because,
his heirs may not be as competent and qualified
to run his business.
4. Liability for business debts is unlimited.
5. There are no checks and controls on them.

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JOINT HINDU FAMILY BUSINESS
The management and control of family business
is generally in hands of senior most male member of
family who known as ‘”karta”. No legal formalities are
required.
FEATURS OF JOINT HINDU FAMILY BUSINESS
1. Only “karta” has right to manage family business.
2. The Liability of all the members is limited. Except
“karta”, who has unlimited liability.
3. Only male can claim the right, female cannot claims
in regards.
4. Existence of this business is not affected by the
death or insolvency.
5. Share of each member keeps fluctuating. It increase
on death and decrease on birth.

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JOINT HINDU FAMILY BUSINESS
ADVANTAGES:
1. Karta has full freedom to run business, can take
decision without any interference.
2. Business is like a insurance cover for children, disable
and sick family member.
3. Every co-partner has limited liability except “karta”.
4. Business don not have any defect of death or insanity.
DISADVANTAGES:
1. Resource is limited as compare to other business
organization.
2. Initiative and sincerity of young members has no
place.
3. Continuity of this business is depend upon continuity
of itself.

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PARTENERSHIP
The business organization runs as partnership is
called as “Firm”.
FEATURES:
1. Two more persons, upto max. of 20 ( 10 in case of
banking firm) join together to share any profit made
by firm.
2. Partnership may be oral, written or implied between
persons joining together .
3. Document containing agreement called as
“Partnership Deed”.
4. Partner cannot transfer his share to outsider without
consent of other partner.

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DKPatilInstituteofPharmacy
PARTENERSHIP
5. It dissolved automatically, when partner dies or
retires.
6. Each partner of firm has unlimited liability.
7. Dissolution of firm takes place in following
circumstance:
 If the partner is agree that firm be dissolved.
 In the event of all partners becoming insolvent.
 If business become illegal.
 In the case court issues order that firm be
dissolved.

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DKPatilInstituteofPharmacy
PARTENERSHIP
ADVANTAGES:
1. Partnership is quite easily formed. Any two legally
competent may start business.
2. There is unlimited liability of partner it serves as
important security to creditors.
3. This firm has longer existence because it is not
dependent on any one person.
DISADVANTAGE:
1. In certain cases, it is difficult to maintain mutual
understanding and harmony among partners.
2. A partner who wants to withdraw his capital from firm

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